In 2014, Alibaba, the Amazon of the East, debuted on the New York Stock Exchange and raised $ 25 billion for the largest public offering (IPO) in history to date. That record was broken in December 2019 by the oil company Saudi Aramco, which managed to raise $ 25.6 billion. And now, Ant Financial, an Alibaba subsidiary and the world’s most precious unicorn, is aiming for the championship, trying to outperform its predecessors with $ 30 billion in sales in a double IPO (Hong Kong and Shanghai). so at an overall valuation of $ 250-300 billion.
Alibaba owns 33% of the company. And Ant owns Alipay, China’s largest payment and credit service. However, Alipay is not just a Chinese PayPal. It’s PayPal, Visa, and a lot more. It offers online financial services such as loans, investments, advice and rating systems. It has more than 711 million active users. His name Ant (Hormiga) is extremely ironic because we are facing a real fintech giant.
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China is a leader in financial technology (fintech). Thanks to the popularity of Alipay and WeChat Pay, the country is becoming a completely cashless society. WeChat Pay is Alipay’s competition. Tencent is the parent company of WeChat Pay. WeChat is a social network. But it’s actually a kind of Facebook, Twitter, PayPal and MercadoLibre rolled into one.
The two systems AliPay and WeChat Pay are very similar. In general, however, it can be said that AliPay is more geared towards e-commerce, wholesale and business-to-business transactions. And WeChat Pay is more social-leaning. Send money to friends and family. However, you can basically do the same thing on either platform. Either, The user can pay the bills, buy groceries, pay for dinner, or send money.
The story of Alibaba is the story of Jack Ma. We’ve all heard of his long string of rejections and failures early in his career. Despite all the walls they put up, he looked at her with great determination. He was born in Hangzhou, the capital and largest city of the Chinese province of Zhejiang, in 1964. Since childhood he was persistent with the English language. To practice, he went to hotels and offered free tours to tourists. The foreigners called him Jack. Her real name is Ma Yun.
He had a lot of difficulties with his studies, but he eventually graduated from Hangzhou Dianzi University in English and International Business. In 1994 he founded his first company, Hangzhou Haibo Translation Agency.
On a trip to the USA he discovered the great power of the Internet. However, he found that there wasn’t much information about Chinese products. And he decided to create a kind of Chinese yellow page with the information in English. Registered the chinapages.com domain in the US. And so the translator became a businessman. In 1998, Ma ran his company from a small department in Beijing. He resigned in 1999 and returned to his hometown of Hangzhou. He founded Alibaba with 18 friends. Eventually he received $ 20 million from the Japanese firm Softbank and $ 5 million from Goldman Sachs. The original idea was to bring Chinese manufacturers into contact with foreign buyers. The rest is history.
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Now Alibaba is actually a nine arms group: Alibaba.com, Taobao Marketplace, Tmall, 1688.com, Aliexpress.com, and Alipay. Ant Financial is a stand-alone company due to regulations. The sensitive issue here is foreign capital. In other words, it’s okay for a foreign company to hold large positions in Alibaba, but it’s not okay to have those in Ant as the financial sector is governed differently in China. Finance and energy are considered strategic sectors and foreigners do not have full access. Here is a very important detail regarding Ant.
Now Jack Ma, the richest man in China, is retired and no longer the CEO of the Alibaba Group. Apparently, he will be following in Bill Gates’ footsteps and leaving the business to do philanthropy. Rumor has it that the Communist Party forced him to retire due to his high profile. I mean, too much popularity and too much influence. And the party patriarchs are not very comfortable (jealous) just letting a man grow that big. Of course, Ma was a longtime party member and on the surface the relationship is good. However, it would not be a surprise if there was friction.
During the coronavirus pandemic, Jack Ma was particularly active in improving China’s image in the world with his philanthropic activities. The businessman runs an international office that delivers medical care in more than 150 countries. In appearance it is a personal initiative. However, the Communist Party took the opportunity to present the campaign as the friendly face of China. So it’s philanthropy with a little bit of propaganda. I don’t think it’s a coincidence that there is always a Chinese diplomat at the airport when Ma’s donations arrive in a country.
During this crisis, Twitter’s Jack Dorsey is donating $ 1 billion. Google ranks second on the list of top donors with $ 907 billion. Then we have the Chinese company ByteDance, which owns TikTok, with 416 billion. MasterCard with 275 billion. Bill and Melinda Gates with $ 261 billion. On this Candid.org list, Alibaba ranks 12th with 144 million. But it seems to me that this only includes donations, not deliveries. In the case of the Jack Ma campaign, donations were mostly made for deliveries.
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Now the relationship between Bitcoin and Ant. Bitcoin is banned in China and Ant has all government support. The Chinese government’s complete control over the financial sector excludes Bitcoin. Ant’s growth is the extension of that control. And we have to remember that the digital yuan will work hand in hand with Alipay and WeChat Pay. Xi Jinping’s new China is a state capitalism that exercises greater control over the economy, especially the financial apparatus.
So that could mean two things for Bitcoin. At the official level, the government’s strategy of having more control over the financial apparatus harms Bitcoin. On the other hand, stronger state control encourages the creation of a dynamic black market. In this area, China’s OTC Bitcoin trading could intensify over time. There are enough anecdotes to say that bitcoin trading is increasing in countries with tight currency controls. Ant’s IPO does not affect the price of Bitcoin. However, any changes in China will have a long-term impact on Bitcoin’s role in China. And only time will tell us exactly what that role is.